Which Asset Class Is The Most Sensitive To a Fed "Taper"?

Markets are starting to price the removal of the unprecedented policy stimulus provided by the Fed. Investors have faced this situation several times in recent years, but as Barclays notes, these prior episodes lacked broad consensus and proved short-lived as further risks to the global recovery quickly re-appeared. The edginess of markets to ebbs and flows in the data and Fed communications in recent months suggests this time is different. Market movements are saying the Fed’s exit is now more ‘when’ than ‘if’. Fed actions have led to some of the most extraordinary market moves on record. Nominal US bond yields are at historically low levels, and real yields have been negative for a prolonged time. Risky assets, by contrast, have rallied sharply, supported by central bank policy even in the face of poor economic data. If the Fed is preparing for an exit, these market moves may need to go in reverse...

Via Barclays,

Which asset classes are more vulnerable to Fed tapering?

We begin to tackle this question by constructing two indicators that seek to capture the sensitivity of various asset prices to Fed easing and the extent to which asset prices have responded to such easing. The explicit assumption here is that asset classes that have been most sensitive to Fed policy and appear most dislocated from historical norms are likely the asset classes at greatest risk.

Our first indicator calculates the beta of various asset classes to the Fed balance sheet expansion. In particular, we calculate the elasticity of asset prices to changes in the Fed balance sheet...

Our second indicator shows the (normalised) deviations of current asset prices from historical averages (z-scores). The idea is to gauge how Fed easing has affected prices relative to historical norms...

Investors who are concerned about the reversal of Fed easing should consider short positions in assets with high elasticities to the Fed and expensive valuations versus history. [ZH - European staples to the S&P 500 and US High Yield and US Healthcare stocks] appear vulnerable. Short positions on the latter make sense to protect risk portfolios.

The re-pricing has already started in safe havens

An earlier-than-expected Fed tapering has already been priced in to some markets, even before the events of this past week unfolded. Safe havens assets that benefited greatly from elevated global tail risks and central bank easing, such as gold, the Swiss franc and even the AUD, have suffered...

If I am understanding it correctly they are pairing CB easing with global tail risk as if they are the same. They imply the CBs will stop easing because tail risk is dropping. Someone has been drinking the koolaid. CBs stopping easing IS the global tail risk. I'm going to sit back with a grin and watch them try to unwind this thing. Popcorn?

I am going to go with Peter Schiff's analysis, "there will be no exit, in fact, they will have to increase the QE". No one would survive the withdrawal from the free money addiction. The QE will continue till the end, and then the shit abyss.

if all that is going on is i'm being front run in the marketplace (China, Japan, Europe, et al) then the Fed would be foolish not to put QE in the hammer land and drive those rates down to zero. this is "in spite of a recovery in equities, property markets and the economy." the Japanese tried an end to QE and they had all sorts of issues when they tried it. but that's because they never figured out a way to grow revenues. Government has been withering on the vine over their for decades now. not true in the USA. we have massive surpluses which also will help drive down rates...though obviously not borrowing costs as the borrowing amounts are staggering. sure..."free money to bankers" but they're creating an industrial recovery to rival the industrial revolution itself. we'll see of course but if Japan really is on the verge of something truly awful here then that's a lot of productive assets that are going off line for a long, long, long time.

Maybe not....perhaps there are enough deluded investors who have faith in the cycle.....and that the economy, based on chart reading, is improving.....and therefore continue to invest in stocks....after all Ben is looking for momentum investing....getting the sideline money back into the markets so that the Dow becomes self sustaining......

I consider the 'stock market' as a bunch of bagholders [which is no different than the definition of people who still have their money tied up in a ponzi or pyramid scheme]... You're hoping it doesn't fall apart before you at least get your money back... As such ~ you'll profess to have faith in the system...

Mostly... Today... That's a bunch of large & institutional bagholders [pension funds especially]... If that dam ever bursts, all bets are off...

I always thought fifty percent of the people win in the stock market, but With all the recent flash crashes, I do not think chances are that good. The market needs to go up so old people can retire and the young can replace them in the workplace.

Wow, the true eigen reveals himself! The guy who takes every opportunity to bash stackers admits that if he is wrong he is ready and willing to rob at gunpoint the very people he insults! Good luck with your plan pal, you are going to need it.

I saw a preview of that show in '09 when the dealers at our bond desk would not give you a bid on AAA corporates. They wouldn't even answer their fucking phones. When this plane goes down, the passengers will not be able to get out of their seats.

Tell us, what are those treasuries priced in again? death of the dollar, death of U.S. treasuries is the same fucking thing. Very strange isn't it? This game of "he who has the most worthless paper wins." fucking stupid.

My best guess is that we'll be drafted into a war to deflect the blame on some manufactured (false flag) foreign threat. FDR pulled it off beautifully in 1941 following 18 months of economic sanctions with Japan. By suckering Japan into attacking, FDR solved both his 30% unemployment problem and unpopularity simultaneously. Sheeples bought the story hook, line and sinker even today. 100,000 American lives was just collateral damage.

This article is irrelevant. First, historical pricing fails to take into account the crisis we entered that necessitated QE. Second, that crisis has not dissipated just because the QE pump went into action, everything that was wrong when Lehman failed is still pretty much the same as it was before, so I cannot believe that we'll see prices drift toward their pre-QE levels...that's not the way it works.

QE has not helped all assets equally either. So I think this is a horribly misguided article.

Finally, the Fed cannot exit, to do so would be an admission of failure and they will never to it. They would rather impoverish us all hiding the truth rather than fall on their own sword.

I wonder what their "fee" was that they charged in order to waste trillions of taxpayer monies. Gee, maybe we should have let the banks fucking die after all and just let the taxpayers keep their money?!?! (or just give it to the taxpayer directly and let them pay down debt or spend it how they saw fit). The rewarding of irresponsible behavior continues...

"We cant exit...who will buy our debt?" good question...no one. UNLESS the US Economy is "the best under any president" and "too hot" as we are hearing in the press these days. that may be the theme....BS, but it's a theme.

i bet we get BLS numbers that start looking really good (and accompanying fawning press coverage) right right about the time the pressure to taper is getting to be too much or the election season - whichever is first.

No kidding, the heading should read "Dipshits". Why the fuck would you be smiling knowing that you are buying shit from a cesspool? These mortgages are what they are "just because". And id anyone else even slightly disturbed by how they admit how casual this procedure is? WTF - make a phone call, spend a trillion?

Look on the bright side... Your neighbors car isn't a Chevy Volt... Furthermore ~ It's unlikely that they have an arsenal of guns to come rob from you when TSHTF... & if bands of vigilantes come cruising the neighborhood, the first houses they're gonna ransack are the ones with Obama stickers on the hybrid vehicles cause they know whose unarmed... Might as well just put up a sign that says "I'm defenseless ~ Come & get it"...

That was going to be my reply to the comment above. Just imagine the free-for-all should the sovereign bond market have a "lehman moment". The last 100 years has taught us one thing, in a "debt is money/fractional reserve" system, sovereign debt and debt slavery must increase or the system collapses.

17 trillion or whatever in 401k's and they have to choose between stocks and bonds. If stocks are deemed unsafe, they will choose bonds. There are trillions in annuities. They choose between stocks and bonds. Again, same result.

Cause a mild panic in stocks and the ten year goes straight to 1%. Everyone is in a rush for the end game but we still have to play a few more innings.

Exactly, in fact, the Germans and Swiss have already opened the door to negative rates. Yes, people will actually pay for the government to lose their money, so long as the status quo is maintain. We have not seen the likes of such madness since before WWI. I expect the outcome will be no different this time around.

In discussions with my coworkers there is a palpable cognitive dissonance between their joy at seeing the equity markets and their 401ks shoot higher and their observation that mortgage rates are too low and the housing market will crash once they have to rise, trillion dollar deficits cannot go on forever, and the Fed cant continue to own the treasury market. Their only regret to date is they haven't been more heavily weighted in equities. Sad thing is they are all college educated and are typically very financially conservative and financially secure, which should make all of this readily apparent. My conclusion is while they are in for a rude awakening, the clueless sheeple are about to get blindsided by a truck.

If printed to the point of $ non-acceptance, an exit will be required, triggering all the pushback and unintended consequences of messing with a market that was on track to bottom and heal itself in 2009.

This is why the Fed should have supported a market floor for stability hundreds of points ago instead of manufacturing upside.

If the true extent of propping up markets across the globe were known, the U.S. dollar would probably already be under severe stress.

The Ponzi does have limits. Let's hope for the sake of the country that talk of tapering means it is already in progress.

SocGen's Albert Edwards: "My working experience of the last 30 years has convinced me that policymakers' efforts to manage the economic cycle have actually made things far more volatile… The current round of quantitative easing will be no different"

how about REITS, thinking of taking out a home equity line and shorting a Residential Reit or the homebuilders? going s hort on anything is risky business, but its hard to imagine the wall street criminals orchestrating a short squeeze in home prices

The only "taper" anyone is gonna see is the taper of their turds in the shitter. The second anyone gets a whiff of the Fed selling, there will be a mad rush to sell bonds. Who wants to be last out the shithouse door?

They can't taper until they run out of Treasuries and MBS to buy. And then they still can't taper. They will have to start just giving cash to banks and the government without pretense or finding some other garbage to buy. The idea that a taper is even possible is brought to you by uneducated noobs. The banking system simply cannot handle it, especially not with the bail in nonsense and the missing customer asset scandals. There are still the same few choices that always existed. 1. Put gold in the banks and let it rise to the correct price to balance out the banker debts and bad assets. 2. Monetize all the bad debt and bad assets on the bankers balance sheets. 1b and 2b: Return Glass Steagall and prosecute fraud so this mess cannot happen again.

As long as we choose QE instead of fixing the problem, the need for QE can only increase. Lets be realistic. We have been doing QE for 40 years, not 4. Japan is following our lead, not the other way around. The Fed was adding an average of about 5% a year to the money supply every year no matter what was going on. So if they stop at a 4 trillion balance sheet, which they can't, and manage to balance the budget, which we can't, we are still locked into 200 billion a year QE anyway. My math says, 1/2 to 1 trillion a year from here on out just to fund the government.

Still... Quin... Even though it's 'theoretically' that easy, one must still account for WILD CARDS... The 'wild cards' in this case are the fact that the 'beneficiaries' in this scenario [all the 'connected' folks within the web, are psychopaths that get bored easy & 'good enough' isn't, in fact, 'good enough' for them]... They'll start fighting against each other which will upset the apple cart at some point...

Kind of like when the Greek Gods or Nordic Gods start tossing thunderbolts at each other...

Francis you have probably become my favorite poster to read on here for many reasons. The only thing I find irritating, and I don't mean to pick at you here, is when people relate this psychopaths to greek gods etc. They are common criminals.

Here is another wildcard. Everyone always puts that quote up "give me contol of the money and I care not who makes th laws..."

Well "they" have control of the money and the laws. So some of the wildcard outcomes that have to be considered may not be palatable. We only seem to focus on the "If... Then...".

That's funny because as soon as I posted the 'Greek Gods' thing I re-considered it... Here's a better "mortal" metaphor:

It's like when your team is cruising along at 14-0 [& Las Vegas has now made them ODDS ON to win the SuperBowl]... Then ~ feeling the 'success', some of the guys on the team get the bright idea to do a rap video & SuperBowl Shuffle... Next thing you know, you're losing home games to the Kansas City Chiefs...

I'm amazed at the things that get pulled off that I'd never even remotely considered...

~~~

Here's the thing though... If it's 'sports wagering' we're talking about, I don't mind trying to think like the thieving crooks in Vegas might and sway to the side of THE HOUSE to skim a few bucks off the HAPLESS FANS taking a punt...

But I can't do it with BANKING or the economy at large because I think it hurts too many people...

I'll accept 'hypocrite' status for that if anyone wants to toss the label on me...

Volatility will ensue, that is, unless it becomes legal to do price-fixing (and come to think of it, it kind of seems that this has already been the case, though it's with banks and not general manufacturing): State take-overs based on "national security?"

The lack of growth will become increasingly more visible: more volatility in the masses as "retirement" funds collapse due to this lack of future funding (inflation/growth). The existing system does not have the ability to operate w/o growth. The thunderbolts might be electrified boomerangs.

No-one really knows what to expect after TSHTF, in an extended Level 2 or 3 situation, but it seems universally agreed that the starving masses will be forced to flee their city dwellings and do whatever it takes to survive, wherever they can find the opportunity and ability to do so.

The FED policy has been to intentionally destabilize the global economies, and they've actually done a fairly good job. They sense the market / citizenry are starting to finally panic... they had hoped this panic would have arrived 2 years ago, but people were so innured to responsibility and reasonableness that they assumed someone would fix it before they had to start worrying about anything, so they kept drinking and boinking, all the while the periphery of the continents was falling into the oceans.

Time has finally arrived... many people now see the contrivance, and still they feel hopeless / helpless, waiting for someone to come fix everything, all the while, still failing to see, it's their fucking problem and it requires their fucking action. DHS and Military prepared, drones with warheads are allowed, noone will object to the deaths of citizens, as long as it is not me.... There is a guarantee the economy will not improve because the economy was in transition for the last 50 years while the citizenry was still living in the past, and the citizenry still do not understand the new paradigm, people still demand a brutish socio-economic system - we failed ourselves, the economy did not fail us. H7N9 is now functional and brutish socio is what we will get.

Gold / Silver / Oil / Bullshit. In the end, most people just don't recognize the world we live in. They read some books, memorized the bullshit, and regurgitate it as if it's somehow an answer... it's a record, and maybe not even an accurate recording. People live in the past, or in the present, but the world naturally requires one to live in the past / present / future simultaneously. Living in the past forces dead models onto an already different circumstance... kind of like forcing hunting / gathering on the industrial age citizens. Living in the present allows the oligarchs the most control, because without reference to past or future, one is trapped in fragments / stills / incomplete descriptors, so the wool is voluntarily pulled.

Society and socio-political organization are always in motion... something most people just can't grasp. Our recent civilization, we came from hunting, gathering, farming, trade specialization, tool making, industrialization, robotics / computerization, automation. Onto these, we can correlate autonomy, barter, feudalism / oppression, slavery, mercantilism, capitalism, unnamed new model. What is all of this transitioning about, one should ask, but so few do. It is about a society working in a Scarcity environment, attempting to produce Surplus, and actually succeeding. That ability to produce surplus, and the ingenuity to produce the tools necessary, allowed our population and prosperity to grow. That process always invilves an upheaval for those who cling to the past, and those who live in the present. For those who live in the continuum, the events were self-evident all along. Everything evolves, and if we're open to it, progresses instead of regresses.

We are now at a similar turning point in civilization and people need to decide very quickly which it will be. We have a choice, even though it may seem we do not. The Oligarchs recognize where we are because they brought us here. The world is about to either celebrate a new birth, a Renaissance, or mourn a death, retreat into the worst of the Dark Ages. The decider is actually human greed. Either people of the world unite against the Oligarchs and work together to continue to advance the clear trajectory of human history, towards Surplus / Automation, or we succumb to greed and the scumbags of the world, and we fight amongst ourselves for what little we ALLOW to exist... Scarcity today is a choice, not a consequence. We could live in a world of significantly increased Surplus, but regressive thinking on the part of the citizenry, and the Oligarchs' intention to regain control over the runaway process, will likely regress society back into the Scarcity. It's plainly obvious if one looks at the meta scale.

We are at the threshold of leaving behind the Scarcity environment and for the first time in human history that we know of, entering into a Surplus environment... if we can control / refine / minimize the disease we call greed, we can achieve what our forefathers have been working at so diligently for over a million years. Reduction of Risk, Increase of Security. I have made my decision... people of the world, what say you? The irony is, we are mostly cooperative, and if it wasn't for the fear of scarcity, mostly generous... the Internet proves me right, this Blog proves me right... if we were mostly selfish, we would not be freely exchanging knowledge and information, the owners of this blog would not be revealing their secrets, they'd be billionaires investing on their insights quietly. You have made a choice already, just recognize it.

"The FED policy has been to intentionally destabilize the global economies"

That's the premise, would you care to actually discuss this?

Tossing by a premise w/o testing it and then running off with it is disingenuous.

I'd argue that it's NOT in the TPTB's interests to intentionally destabilize things. They control/own most everything. The sheeple had been appeased. Does history not tell us that all sorts of things can get pretty ugly if the sheeple get uppity?

The premise that I believe actually fits, and is supported by logic, is that the Ponzi -perpetual growth on a finite planet- is coming to a close. The system that we've been operating under for nearly ever cannot function with NO growth. TPTB have ZERO idea on what to do BECAUSE there is NO fix. Some may actually be sincere on their desires to reduce suffering for other than themselves; some will act just like wounded animals. There is no script. The planet is finite. Best wishes.

The majority of what I wrote above does not even hinge on the "premise" that the FED is intentionally destroying the global socio-economic system. The majority of what I wrote is basically history that anyone, conspirasist or not, can fathom and observe.

I based my statement about the FED on the options available to anyone in authority, if the intention was to save civilization instead of cripple it. The FED could have chosen to act in ways to support society, not just the ruling part of society, the FED could have purchased skills / labor to produce goods / services / technology / enterprise / research, to create a sustainable economy by engaging in building industry to create jobs. I understand the FED may not have the expertise to run such organizations, but if they are going to print money which is OUR DEBT, then they could have delivered that money to appropriate institutions and stipulated conditions, they could have required results, they could have established penalties for not doing so. Instead, the FED chose to funnel the money to the banks and corporations, which feeds the top of the pyramid, to funnel the money all the way to the top.We are in debt so that a few people in Management and a few Banks could benefit, while the majority suffer. It was a choice. Bad choice. Now, since I know they're really not that dumb, I assign the choice to Malevolence.

Trillions of dollars, to indebt nations and their people, so the people who could not pay would be thrown out, ostracised, forever crippled. The plan is obvious, dumb down a generation, convince people the world has limited resources - must kill off 9/10th of the population so we can return to a "sustainable" size, foist feudalism on the people, force them to work for free to repay the interest / debt - they and future generations will suffer under this debt... this has been done before, what do you think the Feudal period was all about? What do you think Slavery was all about? Do you see humanitarian success stories when you look at the largest enterprizes or do you see devastation and destruction? Banks and Corporations.... all of them are destroying people, lands, communities, resources.

We do not live on a planet with inadequate resources in today's context. We could grow food on vertical farms, we could recycle the gases we create, we could purify water, we could use more renewable energy, we could recycle more effectively... we could not rely on the most destructive methods... the world we live in has focused efforts on so many destructive technologies instead of beneficial resources... central control over most products including energy / weapons / control technologies / prisons, etc. If we spent 1/100000th of the money we spent on oil and put it to research to purify water, we could be building pipelines to deliver desalinated water to the globe... instead we deliver control mechanisms. If we had researched technologies to improve renewable technologies - wind / solar / wave / etc, but doing it so it can be distributed production instead of centralized production... we could facilitate a better livelihood... but the world we live in is still control oriented, central control of resources.

I do not suggest we could support an infinite population... we might be able to, but I don't have enough insight into how that could be achieved... I do know we could easlily satisfy 3 to 4 times the size of the current population, if we developed the appropriate technoligies and delivered those across the globe. Instead, we deliver weaponry / military / debt. But regardless, just because I'm saying we are on the verge of a surplus environment instead of a scarcity environment, I didn't even mean to suggest we could have infinite development... we probably can, but I'll stick to a limited development to keep it reasonable... I meant surplus for those alive today, surplus for the world's current population. Just think of what we could achieve if the world stopped development of weapons / military expenditures, used that for research and development of life sustaining mechanisms... By the way, I'm not alone in this premise, Buckminister Fuller already said all of this before me.

As for the FED, if the FED was interested in helping, it would not be putting people / nations into debt, it would be generating opportunities to help people get out of their troubled state. But like I said, society is to blame for not recognizing where we are in the meta scale of sociological development. Ever since invention of the first tool, demand for human labor has been diminishing... the plow put out of work so many laborers who otherwise would manually farm the field... the wheel put out of work vast number of peoplw who would manually transport goods... the Industrial Revolution put even more people out of work at an exponential rate... these people have been so useless we created whole new meaningless professions to employ them. We live in a surplus society but we cripple ourselves by demanding a value from each person... in any case, teh FED could have addressed all of these considerations, could have openly discussed our place in the big picture, where we are as a civilization, the choices we have, what choice do we want to pursue... a vote, a discussion, a dialogue. Instead, they chose, to maintain the dying paradigm, to enslave us, to benefit the criminals.

The Oligarchs don't give a crap about money.... it's about control... and they've enabled the development of enough technology that they can continue to live the life they've come to expect, without too many employees. The vast number of people are mostly unnecessary to maintaining our civilization... those people can be killed off and the oligarchs won't be bothered. I am not condoing this die off, just explaining where the logic lies...

Sorry, I really can't focus on this broad a topic when you seem so opposite to my point of view... it would take a lifetime of discussions to prove to you that we're not even in economic crisis, that the crisis was invented to achieve the ends fast approaching, the enslavement of the citizenry.

Not enough actual physical resources to exploit in order to blow another big bubble.

The importance of a Glass-Steagall becomes less important as more and more people have less and less... Maybe the rich enact new laws to protect themselves from their fellow sharks, but w/o a lot of blood in the water from all the small fish there just won't be enough to feed from (in which case, yes, they'd likely drop their own shields; BUT, most of the rest of us won't care because we're not involved in the game anymore- gods and thunderbolts...).

Years ago I'd offered one end game scenario as being that the Fed buys up all the crap and debt and then goes T-U. Does anyone back the Fed in cases of possible default?

Maybe the "plan" HAS been to unwind things by disconnecting from Wall Street and the Fed, to have companies take back more control from Wall Street (buy-backs) and to ax the Fed (structure) from banking (nationalize banks*)?

* Govt "negotiates" for pennies on the dollar due to distress (which will be marketed as being a "national security" issue). I'm in no way clear enough on all the complexities here, just hoping that other more-knowing folks could pick it up and run with it.

Do not undestimate the psychopaths.
I would LIKE to think you're right, but the Fed has 100 years of successful manipulation under their belt :-)
They could retire debt, pull the lame platinum coin scam or do something else. Keep stacking but don't be disappointed if it takes another 10-15 years to come out on top..

The PROBLEM isn't so much the debt (though it's clearly NOT a good thing) as it is the inability of the System to be able to produce growth. As you note we can find ways of scrubbing the balance sheet. BUT, there's no such magic for making NATURAL CAPITAL available at growth-maintaining (as though there could ever be perpetual growth on a finite planet!) levels.

The FED will taper only until tested by the reemergence of the so called bond vigilantes who will grow increasingly emboldened by a weakened FED. The FED will cower, retreating back to the printing press policy and avoid facing a hard-hitting reality. It's quite simple; The US GOV'T cannot afford higher rates. Each 100 bp rise in rates will be one more nail in the coffin of liberty. Each rise in inflation (CPI) sucks moar money from the hard working taxpayers into entitlements and Government "programs". Our criminal Governments worldwide have spent taxpayer money without a shred of fiscal or fiduciary responsibly. These Governments make promises to give and give and give (take take and take) that they have no business making. Sadly, its the pragmatic ones, the savers, the responsible citizens that will be punished the hardest by the liberal spenders as they seek to confiscate our personal property, assets and savings in the name of "fairness" and to protect their elitist political jobs.

Much "wealth" was fictionally derived. Contraction will erase a lot of that. If you have stuff that's productively in use then you'll be more likely to be less scavanged because you provide value. Those around you, local community KNOW these things. What the far-away central govt says or does will only become less effective, not more so: the reason being is that MOAR requires MOAR energy, and energy is becoming less readily available (at some point it will come down to the Russian saying toward the end of the Soviet era- "They pretended to pay me so I pretended to work."- this should be clear that things would tend to wind down and not up).

"Our criminal Governments worldwide have spent taxpayer money without a shred of fiscal or fiduciary responsibly. These Governments make promises to give and give and give (take take and take) that they have no business making."

We ALL asked for growth. We bought into this Ponzi. Sorry, but our hands are not clean. Pointing fingers does nothing to expose the fundamental problems: and, TPTB like it this way because they can program the masses to engage in finger-pointing rather than challenging the very system(s) that maintains their control/power.

Washington, D.C. real estate would probably be the most sensitive to Fed tapering. I would suggest going short an REIT that specializes in DC real estate. I think there are a couple of them that trade.

Taper? This bus is 6 inches from the cliff and going 100 miles an hour, if he keeps going we crash, if he speeds up we crash, if he slows down we crash, if he slams to breaks we crash. The FED has reached the end of Keyne's "Long Run" and we all know what's awaits there.

The April FOMC minutes mentioned Tapering but Ben came out live in front of Congress and pretty much said we will continue to do QE for the foreseable future. I don't see why ppl are beginning to debate an end to QE. However, I'd speculate that if Japan is on the verge of proving to the world that QE doesn't work, maybe Ben needs to quit QE here beforehand so the FED policies continue to seem viable.

What's better, going down with a sinking ship or trying to find another, bigger bucket to bail out the water? That's all QE 1,2,3 etc... bigger and better buckets. Taper would mean abandoning the bigger better buckets idea. Ben won't be at Jackson Hole, so until that point in time QE is full steam ahead!

Does the Qe debate even matter anymore??? The FED is in a Liquidity Trap. Total pushing on a string. The market correction is coming either way, it's just a matter of which assets/commodities lead the reset.